How Will You Win (Strategically Speaking)?
Even if your “Where to Play” (see last post) is not particularly unique, there are always ways to win. Case in point: corner coffee shops, so common they’re found in just about every town and city on the planet. Nothing at all special or unusual about that space.
Who wins in that unremarkable market? Starbucks. Starbucks is the undisputed heavyweight champion of corner coffee shops.
The simple secret to winning in any given space is this: offer a better value equation than everyone else.
Now, there are many dimensions to value beyond quality, cost, and speed. In many of today’s market, those are simply ante to the game. But Starbucks plays a different game. Truth be told, they lose on quality, cost and speed. In fact, when I when to New Zealand, they asked me why I drank Starbucks coffee. To a native New Zealander, Starbucks burns their coffee, charges too much, and it takes too long. Who seeks out Starbucks in New Zealand? Tourists.
For Americans, and Americans abroad, Starbucks wins hands down. What Starbucks has done by understanding the psyche of the typical middle American (at nearly every age) is to create a value proposition that gets into the more emotional and thus transformational (read, winning) dimension of value: the intangibles.
Starbucks doesn’t sell coffee. They aren’t simply a convenient corner coffee shop. They are a “third place.” Something in between your home and office. A place that’s comfortable. A place with a unique experience that exhalts coffee to a far higher level than the typical corner coffee shop and in a far more novel way, a way that effectively produces a sort of daily ritual-forming caffeine cult.
You do not have to be a coffee drinker to appreciate the strategy. You’re not buying coffee at Starbucks. You couldn’t possibly be…no one in their right mind spends $4 on a cup of coffee. You’re buying a third place, a quick escape. You’re buying a personalized daily ritual. You’re buying a clique community. And you can buy it all over the world with consistency.
In fact, you have to speak an entirely different language in a Starbucks, one that they taught you. You’re paying for the Starbucks version of Rosetta Stone. It’s a point of pride with Starbucks clientele.
I remember when I was writing The Elegant Solution back in 2005 and studying Starbucks from the personal ingenuity angle, focusing on the “barrista.” I stood at the end of the line and wrote down a couple dozen drinks with complicated, coded, and nuanced names…and they were no where to be found on the menu board.
And while this treads on the third question in Roger Martin’s cascade (What capabilities do we need?) which I’ll cover in a future post, a Starbucks barrister does not view their job as making coffee. Here’s what one told me in an interview back in 2005:
“This is definitely coffee art. But if you think people are buying coffee, you’re wrong. There’s something going on here…the same people come in every day, even though they have plenty of options. After a while, you get to know people. You talk to them, you learn about them, maybe what they do, or what their kids’ names are. You want to know more. There’s a little bond built. You start to figure out that they look forward to coming here for reasons other than the buzz. They like the familiarity…they like knowing you know their name, that you remember their favorite drink. Our team is like a little family, and they like that. We have fun, and they like that. Energizes them, lifts them. You can see it. There’s a kind of funky trust thing going on. You know how you talk to the bartender or your hair stylist? That sort of thing. It’s funny, you get a certain sense of pride working here that you don’t get other places. I know, I’ve worked in them. And that makes you want to do your job the best you can. More so, even. Make it better if you can. I’m just part-time, I’m in school part-time, I want to be a journalist. But I’ve learned a lot about people being here. It’s going to make me a better writer, interviewer, I think. Not everyone feels this way, but I feel like I’m providing really busy people a nice start to a hectic day in a safe little getaway. We’re picking people up, or perking them up. [smiles] Pun intended. It’s not just a coffee shop, and it’s not about the coffee.”
Lesson: your where-to-play can be ordinary and even fixed, but a how-to-win that is extraordinary compared to your competitors will enable you to win.
Expecting to win by offering essentially what your competitors are offering in essentially the same way and in essentially the same space is the business version of the insanity definition.
It simply does not work. It never has and it never will.